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Disruptive innovation, innovation adoption and incumbent market value: The case of Airbnb

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  • Zach, Florian J.
  • Nicolau, Juan L.
  • Sharma, Abhinav

Abstract

The purpose of this article is to analyze the market value impact of actions taken in response to disruptive innovation; specifically, actions that incumbent lodging firms implement to adopt the innovation of peer-to-peer trading-based accommodation rental. As incumbent firms need to device strategies to accommodate the disruption stemming from a new entrant with a disruptive business model, we analyze the differentiated efforts of four incumbent lodging firms to compete with the peer-to-peer lodging firm Airbnb. This study is the first to quantify the effects of innovation on incumbent tourism firms challenged by a disruptive entrant. It finds that adoption speeds, that is first vs. late adoption, make a difference as the former are awarded a significant increase in market value.

Suggested Citation

  • Zach, Florian J. & Nicolau, Juan L. & Sharma, Abhinav, 2020. "Disruptive innovation, innovation adoption and incumbent market value: The case of Airbnb," Annals of Tourism Research, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:anture:v:80:y:2020:i:c:s0160738319301756
    DOI: 10.1016/j.annals.2019.102818
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    2. Negruţiu Cristian & Onea Alexandra & Bădescu Ruxandra, 2020. "Innovation trends in Romanian logistics providers industry," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 14(1), pages 807-818, July.
    3. Ziad Alrawadieh & Zaid Alrawadieh & Gurel Cetin, 2021. "Digital transformation and revenue management: Evidence from the hotel industry," Tourism Economics, , vol. 27(2), pages 328-345, March.
    4. Mario Coccia, 2020. "Cyclical phenomena in technological change," Papers 2010.03168, arXiv.org, revised Oct 2020.
    5. Bianco, Simone & Zach, Florian J. & Liu, Anyu, 2022. "Early and late-stage startup funding in hospitality: Effects on incumbents' market value," Annals of Tourism Research, Elsevier, vol. 95(C).
    6. Minhaz Farid Ahmed & Mazlin Bin Mokhtar & Chen Kim Lim & Anthony Wong Kim Hooi & Khai Ern Lee, 2021. "Leadership Roles for Sustainable Development: The Case of a Malaysian Green Hotel," Sustainability, MDPI, vol. 13(18), pages 1-26, September.
    7. Haftor, Darek. M. & Climent Costa, Ricardo, 2023. "Five dimensions of business model innovation: A multi-case exploration of industrial incumbent firm’s business model transformations," Journal of Business Research, Elsevier, vol. 154(C).
    8. Sharon Teitler‐Regev & Tchai Tavor, 2023. "The effect of Airbnb announcements on hotel stock prices," Australian Economic Papers, Wiley Blackwell, vol. 62(1), pages 78-100, March.
    9. Heesun Gha & Min Young Kim & Hyeon Jin Ro & Seungho Choi, 2023. "Importance of CEO Attention in Influencing Incumbent Responses to Disruptive Innovation," Administrative Sciences, MDPI, vol. 13(6), pages 1-20, May.
    10. Nawal Chemma, 2021. "Disruptive innovation in a dynamic environment: a winning strategy? An illustration through the analysis of the yoghurt industry in Algeria," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-19, December.
    11. Zhang, Huihui & Zach, Florian J. & Xiang, Zheng, 2023. "Design standardization by Airbnb multi-unit hosts," Annals of Tourism Research, Elsevier, vol. 98(C).
    12. Sharma, Abhinav & Shin, Hakseung & Santa-María, María Jesús & Nicolau, Juan Luis, 2021. "Hotels' COVID-19 innovation and performance," Annals of Tourism Research, Elsevier, vol. 88(C).
    13. Youssef, Mayada Abd El-Aziz & Eid, Riyad & Agag, Gomaa, 2022. "Cross-national differences in big data analytics adoption in the retail industry," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    14. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).
    15. Lijie Feng & Guo Qin & Jinfeng Wang & Ke Zhang, 2022. "Disruptive Innovation Path of Start-Ups in the Digital Context: The Perspective of Dynamic Capabilities," Sustainability, MDPI, vol. 14(19), pages 1-18, October.
    16. Zach, Florian J. & Schnitzer, Martin & Falk, Martin, 2021. "Product diversification and isomorphism: The case of ski resorts and “me-too” innovation," Annals of Tourism Research, Elsevier, vol. 90(C).

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